Hero MotoCorp Plans Major Investments in Premium and Electric Vehicle Segments
Hero MotoCorp, a leading two-wheeler manufacturer in India, has announced significant investments in the premium and electric vehicle (EV) segments. Niranjan Gupta, CEO of Hero MotoCorp, shared in an interview with CNBC TV18 that the company’s Rs 1,500 crore capital expenditure (capex) will predominantly focus on the development of premium motorcycles and EVs. This strategic move aligns with the evolving landscape of EVs, as Gupta anticipates substantial transformations in the market within the next 2-3 years.
Gupta urges industry observers to avoid basing future predictions solely on current market leaders, emphasizing the likelihood of rapid shifts in market dynamics that will present both new opportunities and challenges. Despite this uncertain terrain, Hero MotoCorp remains committed to investing Rs 1,000-1,500 crore in capex.
For the fiscal year 2024, Hero MotoCorp has ambitious plans to launch its largest number of premium bikes in history. This initiative aims to meet the growing demand for premium motorcycles in the Indian market. Gupta also disclosed the company’s intention to revamp over 500 stores in the upcoming months. Furthermore, the CEO aspires to establish more than 100 premium stores within the next fiscal year.
To enhance customer experience, Hero MotoCorp is launching Hero MotoCorp 2.0, a program aimed at modernizing its dealerships. This endeavor seeks to provide a contemporary retail experience aligned with the expectations of the next generation of customers. Over the next few months, more than 500 stores will undergo a transformation, while exclusive premium stores will be introduced in select markets to bolster brand imagery.
Gupta underscores the significance of expanding exports for Hero MotoCorp’s future growth. While the company maintains a strong position in the commuter segment, Gupta believes that securing market share in the premium and EV segments will be crucial in the coming years. By concentrating resources on key markets such as Nigeria, Colombia, Bangladesh, Nepal, Sri Lanka, and Africa, Hero MotoCorp aims to extend its presence in these regions. Additionally, the company is eyeing entry into several Southeast Asian markets.
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In terms of EVs, Hero MotoCorp has made progress with its Vida electric scooter. Following successful pilot testing in three cities, the e-scooter will soon be available in over 100 towns. Within the next 12 months, Hero MotoCorp plans to sell the Vida scooter through more than 200 outlets across India. This endeavor reflects the company’s dedication to expanding its footprint in the burgeoning EV market.
Regarding the impact of the reduction in the Faster Adoption and Manufacturing of Electric Vehicles (FAME) subsidy, Gupta asserts that companies that innovate rapidly will weather the market conditions. He foresees potential consolidation among companies that fail to keep pace with the evolving landscape.
While the retrospective effect of the returning charger cost has been minimal, the industry as a whole has experienced a setback of Rs 30,000-40,000 per vehicle. Gupta highlights the imperative for companies to prioritize innovation in the EV sector to overcome challenges posed by subsidy reductions.
About Hero MotoCorp:
Hero MotoCorp Limited, an Indian multinational motorcycle and scooter manufacturer based in New Delhi, holds the esteemed title of being the world’s largest two-wheeler manufacturer. With an impressive market share of approximately 46% in the Indian two-wheeler industry, the company’s market capitalization stood at ₹59,600 crore as of 27th May 2021.
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